Congress Battles White House Over Medicaid Rule Changes

Both chambers of Congress easily approved a delay to implement proposed Medicaid regulations expected to reduce federal Medicaid payments to states by up to $50 billion over the next five years. The fate of their effort remains unclear, however, because President Bush has vowed to veto any legislation pertaining to a delay.

The House and Senate measures would suspend seven administrative changes that the Bush administration proposed for Medicaid. The changes would cut costs by ending payments for activities that the administration maintains were never intended to be funded under Medicaid, such as transportation of beneficiaries to care appointments. The cuts include sharp limits on two services heavily utilized by people with mental illness: targeted case management and rehabilitation services.

Congress responded to the Bush proposal by passing a one-year moratorium last year on implementation of the regulations. The moratorium expired for most of the regulations on May 25 (Psychiatric News, May 2).

The House bill (HR 5613), which would delay the cuts until April 2009, was passed in April, and the Senate acted in May by adding an amendment to a House-passed war-funding bill (HR 2642). Since the rule-change suspensions were passed in different measures, however, their differences need to be reconciled.

Mike Leavitt, secretary of Health and Human Services, announced in late May that the administration would voluntarily delay two of the new Medicaid regulations affecting hospital payments until August to address concerns of critics.

The U.S. District Court in Washington, D.C., joined in the dispute on May 23, just days before the one-year moratorium was set to expire. The court ruled that the administration could not enforce the regulation to cut Medicaid payments to “safety net” hospitals and clinics.

The Medicaid rule changes have been strongly opposed by mental health advocates. APA and others have been especially critical of the proposal to tighten the use of targeted case management—a program that coordinates the range of health care and support services needed by people with disabilities. The targeted case management changes, which are the only ones that went into effect on March 3 under an interim final rule, bar federal funding to school-based medical services for children with disabilities and set a limit of one case manager per child.

Another of the proposed changes that APA opposes limits federal funding for rehabilitation services, such as help with transition to independent housing, for people with mental illness or developmental disabilities.

The text of the regulatory moratorium bills can be accessed at<http://thomas.loc.gov> by searching on the bill numbers, HR 5613 and HR 2642. ▪